Power Play: Makhlouf's future in question as Ireland piles in

5:53 pm on 5 June 2019

Power Play: The pressure is mounting on Treasury Secretary Gabriel Makhlouf and whether or not it's tenable for him to remain in the role while he's subject to a State Services Commission investigation.

Gabriel Makhlouf, Secretary of the Treasury. Half Year Economic and Fiscal Update 2017.

Gabriel Makhlouf, Secretary of the Treasury. Half Year Economic and Fiscal Update 2017. Photo: RNZ / Rebekah Parsons-King

Irish newspaper headlines are ramping up overseas, with some commentators now questioning Mr Makhlouf's appointment as Central Bank Governor in Ireland when his term at Treasury finishes on 27 June.

There's no question the media's coverage could cause serious reputational damage to Mr Makhlouf, but it seems the story is no longer confined to the shores of Aotearoa.

The sorry saga of hack-gate began about 6pm last Monday when a National Party staffer discovered parts of the government's Budget had been uploaded to the Treasury website.

By 10am on Tuesday the Opposition had started drip-feeding details of the Wellbeing Budget - due to be released by the Finance Minister Grant Robertson on Thursday - to the media.

That evening Treasury released a statement saying a deliberate and systematic hack had been referred to police. Mr Robertson added to the mess by connecting the "hack" to the National Party - something he still denies doing and refuses to apologise for.

Things escalated when Mr Makhlouf went on RNZ's Morning Report on Wednesday and described the activity as akin to attempts to prise open the bolt of a door 2000 times until it weakened and the unknown actors got access to the documents.

By Budget Day, police had found nothing and it's since been revealed the National Cyber Security Centre told Mr Makhlouf Treasury's systems had not been compromised.

National Party leader Simon Bridges told Morning Report's Corin Dann this morning he didn't come down in the "last garden shower" and that Mr Robertson must have known Mr Makhlouf was referring the matter to the police before doing so.

He said the no surprises policy, which has "morphed into 'we ask you prior to what we do what you think about things", means this almost certainly had to be the case.

Mr Robertson however said he can "100 percent" confirm he was only told about the police referral after it had already happened - a pretty crazy and incredibly stupid statement to make if that's not the case.

The Minister also told RNZ today he will hand over any communications the State Services Commission (SSC) asks for as part of its investigation into Mr Mahklouf's handling of the botch-up.

It would be brave for Mr Robertson to open himself up to that sort of interrogation if he wasn't positive his office was clean.

The investigation launched by the State Services Commissioner Peter Hughes on Tuesday afternoon will look at what Mr Makhlouf said publicly and to the minister about the unauthorised access, and his decision to refer the matter to the police.

If the investigation throws up any fault on Mr Makhlouf's part, or in the extreme finds he mislead the Finance Minister, then it's difficult to see how he'll still have a job to go to in Ireland when his term at Treasury finishes on 27 June.

The National Party has for a week been calling for both Mr Makhlouf's and Mr Robertson's heads and has also demanded Mr Makhlouf at the least be stood down while the investigation is carried out.

How he's not been put on leave yet is quite baffling.

Mr Makhlouf said he's acted in good faith throughout the process and was cooperating with the investigation.

Mr Bridges told RNZ there was only two plausible explanations for what happened: bungling incompetence or dirty politics.

He also speculated that Mr Makhlouf was simply the fall guy for a wider political conspiracy conducted by Cabinet ministers - huge accusations that the SSC investigation may or may not get to the bottom to.

For Mr Bridges, it seems to be a case of go big or go home.

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